By RON AIKEN
How conflicts of interest stay out of sight in state government
South Carolina Department of Transportation commissioners wield a lot of influence, and chairmen especially so.
They govern the group that governs the DOT, an agency with more than 4,000 employees and a $1.6 billion budget.
Current chairman Mike Wooten represents the Seventh Congressional District, whose state legislative delegation numbers 24 House and Senate members.
He was elected as the only choice for the position when his only opposition dropped out voluntarily before the vote. Once voted in, legislators cannot remove commissioners, meaning they technically are accountable to no one. The governor used to be able to remove them, but that executive power was removed by the legislature in 2010.
A commissioner’s reach is enormous, as it extends not just to all 4,000-plus DOT staff but to private sector engineers, contractors, construction and paving firms of every size, and state as well as local governments across the state.
Professionally, Wooten is a civil engineer and founder and president of DDC Engineers, which has millions of dollars in contracts with the same local government agencies who receive funding from and rely on good relationships with the DOT. In one case The Nerve exclusively documented, his firm was a subcontractor on a deal in which DOT acted as a pass-through for hundreds of thousands of dollars in FHWA funding, meaning his firm was in line to receive money with DOT connections.
As that story also documented, when the deal went sideways and his firm stood to lose money, he actively took a role in a situation between a local government, Horry County, and another public body, Coast Regional Transit Authority, directly influencing a process that led to the ouster of Coast RTA’s CEO. This was a clear case of how Wooten, who was not elected but appointed, could use his influence as a DOT Commissioner to leverage pressure on an elected body in a case where his firm had a financial interest.
THE POWER OF SUCCESS
Horry County Council is just one of several area municipalities and county governments with whom DDC Engineers holds contracts worth more than $13 million, a review of records by The Nerve through the Freedom of Information Act has found.
Those lucrative contracts with the local governments are not to be found on Wooten’s Statements of Economic Interest filed with the S.C. Ethics Commission, however, because the commission only requires him to disclose any contracts directly with the DOT. If you’re a subcontractor of a firm with a DOT contract, you do not have to report that income.
When asked if a DOT commissioner had to report any personal business he has with the towns and counties whose interests he represents, ethics commission executive director Herb Hayden said no.
“Only if the contract is with a state entity,” he wrote The Nerve last week.
Those rules mean there is no way to know how much or how little business Wooten has with the various towns and counties in the Seventh Congressional District – a district that includes the top summer tourist destination in the United States, Myrtle Beach – without pursuing Freedom of Information Act requests with each of them, as The Nerve did.
In one municipality, the town of North Myrtle Beach, a review by The Nerve of contracts with DDC dating back to 2009 showed $1.03 million worth of work. Myrtle Beach officials reported a figure of $1.56 million since 2010, but that does not including a publicly reported $10.4 million outfall system DDC Engineers received and touted on its website.
Previous reporting by The Nerve showed DDC Engineers also received more than $10,000 in direct payments from the State Infrastructure Bank.
In another contract received through a Freedom of Information Act request in Georgetown County, DDC had a contract worth $509,129 in 2011. In the town of Georgetown, contracts going back to 2011 total $51,600. Reports on DDC’s website and Facebook page list many more retail and public facility projects in the hundreds of thousands.
Though neither Horry County nor the town of Surfside Beach responded to requests by The Nerve for copies of their contracts with DDC, the $13.1 million worth of work the firm performs in just the examples found above (which does not include work DDC has done as subcontractor) show that Wooten’s financial position is tied to contracts with entities he both directly works with and supervises as a DOT Commissioner.
TOO CLOSE FOR COMFORT?
Despite the distance from direct DOT funds provided by subcontracting, Wooten’s firm works directly with the DOT on a recurring basis in another area. In Wooten’s required public filings as a commissioner he states that “DDC applies for regulatory permitting approval from the DOT for all projects which require access to the SCDOT controlled rights-of-way.”
Given that relationship, it’s not difficult to imagine a scenario in which a DOT engineer supervising an Horry County project knows that the company submitting that permit for his approval or denial is owned by a person governing his agency.
Just as easy to imagine is a local municipality eager for DOT attention to its pressing road problems being aware that a bid for a contract comes from a firm owned by the chairman of the DOT commission.
But it doesn’t have to be that generic, according to Sen. Tom Davis, R-Beaufort. In fact, it can be quite specific.
“I recently sat down with the executive director of the Alliance to Fix Our Roads and asked him why after years of studying the issue the recommendations they put forward to improve roads included no options that included reform of the commissioner system,” Davis said. “He said the members of his alliance – contractors and pavers, bond lawyers, engineers – are people who do business with the DOT and don’t want to be critical of the structure for fear of drawing the wrath of a commissioner.
“The message was clear. The people on the ground who depend on DOT funding are very careful not to offend a commissioner.”
In Wooten’s case, a commissioner also has a business that does right-of-way work with DOT and contracts with those same types of firms Davis said are so eager to please commissioners they’ll avoid criticisms and ignore options to make the system work better for South Carolinians.
“It made no sense to me how all their recommendations to improve DOT involved getting them more money by raising taxes or other means and had nothing about improving transparency and accountability in DOT,” Davis said. “But the answer was fear, that fear is real and it speaks volumes to the power and influence commissioners have over the people they’re over.”
Some of whom, in Wooten’s case, have business with them.
One area where Wooten has drawn the eye of the Ethics Commission, however, is in his reporting of gifts on his annual Statement of Economic Interest. In the case of gifts, officials are required to submit detailed forms each year showing who paid for the lunches, breakfasts, dinners and other gifts they receive, so that taxpayers can know exactly who has their ear.
In Wooten’s first year on the commission, 2013, he submitted his forms properly, listing $554.50 worth of meals for his 2014 SEI. He stated under the heading of “donor” that the “Complete list (is) at SEC,” which The Nerve asked for and received a copy of.
In 2015 he did not, however, despite again claiming on his SEI filing that “Complete list (is) at SEC.”
“The Commission’s paper records do not contain a list of 2014 gifts (for Wooten),” said state Ethics Commission executive director Herb Hayden. “I’m not sure why the list was accepted.”
“I will contact Mr. Wooten and advise him that he must amend his 2014 and 2015 SEIs to reflect an itemized list of all gifts.”
For proponents of accountability, knowing to whom one should complain is more than difficult – it’s nearly impossible.
“It’s very clear that a commissioner owes his first allegiance to the legislators from that delegation,” Davis said. “But what that system does is create seven power centers, each one with a moat around it and a castle and everyone trying to bring as much back to their area as they can.
“The whole process creates a parochial system rather than the statewide view South Carolina needs, and more money isn’t going to fix that problem, it’s only going to make the position of commissioners even stronger.”
Reach Aiken at 803-254-4411. Email him at ron@thenerve.org. Follow him on Twitter @RonAiken and @TheNerveSC.